1. Introduction

2. Methodology and data

3. Conclusions

References

The paper presents a new approach for product value analysis by combining a classical approach with a straightforward (intuitive) one and incorporating a new method of calculating (setting up) a statistical confidence interval in terms of functionality and cost. In this process, the value analysis team can observe the differences between the ideal and real function to cost ratio and easily set up a confidence interval avoiding negative effects on the overall product quality. Moreover, computing an “close to optimal state” for the function-cost ratio, results in a better understanding of the differences, thus aiding the process of generating solutions for adjusting the ratio in case of cost reduction or reallocation, integrating a new function, product reengineering or modernization.

Introduction

Product value analysis is a systematic method to improve the value of an existing product, with the help of functional analysis. The term of product value has different meanings, depending on the view point of authors: production value (referring to production costs), market value (referring to a selling price) and functional value (referring to utility). In terms of product value analysis, the specific literature refers to it as the function to cost ratio. A paper published by Jay C.I. & Bowen P.A. (2015) illustrates the impact of value analysis (VA) on innovation within organizations. Moreover, the paper shows that from its methods and techniques, the concept evolved under a number of different names, i.e. from value analysis (VA), value engineering (VE) to value management (VM) and even value engineering teardown (VET) or quality function deployment (QFD). Thus, showing that value analysis is broadly-based on elements and theories of function utility and cost. Product functions refer to what a product does and some authors characterized it in a simple verb-object format (Stone, R.B. & Wood, K.L., 2000), others in a verb-noun format (Lambert, J.T., 2000) and even in a more elaborate form that include function taxonomies (Gheorghe, C.M. et al. 2013), while others propose new methods for function conceptualization in order to ease the link with the product’s components (Eckert, C., 2013, Duarte, A. Y. S. et al., 2015).